Jumia Technologies AG, Africa’s leading e-commerce platform, has announced plans to shut down operations in South Africa (where it operates as Zando) and Tunisia by the end of 2024. The decision is part of a strategic move to optimize resources and focus on higher-growth markets like Nigeria.
Shifting Focus to Stronger Markets
According to Jumia, South Africa and Tunisia contributed minimally to the company’s overall performance. In 2023 and the first half of 2024, these markets accounted for only 3.5% and 2.7% of total orders, and 4.5% and 3.0% of gross merchandise value (GMV), respectively.
A Tough Call
Jumia’s CEO, Francis Dufay, acknowledged that the decision to exit these markets was difficult but necessary. He emphasized that focusing on stronger markets would enhance operational efficiency and accelerate growth.
“After careful analysis, we determined that exiting South Africa and Tunisia was essential to prioritize our more promising markets. Competitive and macroeconomic challenges in these countries limited their growth potential,” said Dufay.
Despite the challenging decision, Dufay expressed gratitude to Jumia’s employees, suppliers, and partners in South Africa and Tunisia for their efforts in serving customers.
Refocusing on Nine Key Markets
With the exits, Jumia will concentrate on its remaining nine markets: Nigeria, Algeria, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Senegal, and Uganda.
Jumia’s efforts to streamline its operations are part of a broader strategy to move toward profitability. The company posted a 64% decline in operating losses in 2023, reducing its loss to $73 million. Dufay expressed confidence in Jumia’s ability to continue improving cash utilization and achieving topline growth in 2024.
Past Strategic Shifts
In previous efforts to cut losses, Jumia slashed its workforce by 20% in Q4 2022, resulting in 900 job cuts. Additionally, the company discontinued its unprofitable Jumia Food business, underscoring its commitment to sustainable growth strategies.